Week of February 26, 2009

EURUSD continues to consolidate within the recent 1.2512-1.2990 rise with trendline resistance off the 1.2990 high coming in today at 1.2851 while trendline support off the 1.2512 low comes in at 1.2689.  As to the fall from the December 18, 2008 high of 1.4718, this fall remains active as only a daily open and close above 1.3355 will complete this fall while 1.2512 holds.  Look for a break of the above mentioned trendlines to see further extension in the direction of the break as a breakeout will occur will within the next 3 days.

GBPUSD intraday fall from yesterday’s 1.4606 high remains active as only a 1 hour open and close above 1.4330 will complete this fall while 1.4160 holds, as prices will then move within a 1.4330-1.4436 consolidation zone before another attempt to the downside. Assuming prices enter the above mentioned zone, look for a sustained break of the above mentioned zone to see further extension in the direction of the break.  Look for intraday resistance at 1.4290 to initially limit the upside as prices as a failure here suggest prices to move lower with a break of yesterdays low targeting 1.3819.  As to the broad outlook, risk remains firmly to the downside with the fall from the September 25, 2008 high of 1.8666 remaining active as ONLY a daily open and close above 1.5475 will complete this fall while 1.3502 holds.

More updates later. RW